Given that ST Residential, that Starwood-led entity, holds the loan on the $475 million Terranea Resort, the future of the swanky Rancho Palos Verdes development has been a little murky. Nothing like $100 million to clear things up--and put aside any talk of ST Residential foreclosing on the Mediterranean-style oceanside property. Today, developer Lowe Enterprises, Terranea's developer, announced the $100 million capital investment, which comes from a group consisting of JC Resorts, a San Diego hospitality company, and existing and new investors, including affiliates of ST Residential. "This puts Terranea Resort on strong financial footing," Michael H. Lowe, Executive Vice President and Chief Investment Officer at Lowe Enterprises, tells us. He opted not to disclose the amounts that each party put in, but says "the controlling ownership continues to be Lowe Enterprises in partnership with JC Resorts."
And what experts are saying about the deal via the Wall Street Journal: "That Terranea’s lenders restructured the debt rather than foreclosing illustrates a trend in the U.S. hotel market, said Alan Reay, president of Atlas Hospitality Group, a California hotel broker. “Default can be crippling for business at a resort like this,” Mr. Reay said. “What we’re seeing in the hotel sector, especially in the higher-profile deals, is that the lenders are more apt to try to work something out than to actually foreclose. If not, they’ll ? sell the debt.”
Additionally, Terranea can now start closing on about two dozen contracts on the villas and homes. Residences at the resort start at $1.3 million, Lowe tells us. And, in contrast to some of those reports surrounding local developer Sonny Astani's public dealings with Starwood-- and Astani's PR campaign portraying ST Residential as the newest vampire squid wrapped around the face of humanity--Lowe says has his experiences with ST Residential and Starwood have been positive. "They have been a good partner to work through what’s been a complex process," he says.
Bonus: Check out ST Residential's new web site, which shows all the properties they both own and hold construction loans on.
· Meet the Parents! ST Residential Talks Solair, Terranea Resort, More [Curbed LA]